Macfarlane v. Green
REITERATIONFacts
The Antecedents: The underlying dispute concerns a mortgage agreement between W. R. Macfarlane (plaintiff-appellant) and B. A. Green (defendant-appellee). The mortgage, dated December 1, 1921, for P60,000, covered two parcels of land: one in Manila and another in Bataan. The Manila property was already subject to a P40,000 mortgage to the Philippine Posta Savings Bank. When the mortgage fell due, Macfarlane initiated foreclosure proceedings on both properties. Procedural History: Macfarlane obtained judgments for P60,000 in separate foreclosure actions for the Manila and Bataan properties. In the Manila case (Civil Case No. 22285), the Manhattan Hotel was sold at public auction on September 18, 1925, for P65,000 to Macfarlane, who later resold it for P135,000. After a significant delay, Macfarlane sought execution of the Bataan judgment. Despite Green's objection, a writ of execution was issued, leading to the sheriff's sale of the Abucay Plantation on October 27, 1928, for P33,000 to Macfarlane. Green objected to the approval of this sale. The Petition: This appeal arises from the Court of First Instance of Bataan's decision declaring the sheriff's sale of the Abucay Plantation null and void and ordering Macfarlane to account for the proceeds from the resale of the Manhattan Hotel. The appellant assigns as error the lower court's refusal to confirm the sale, its admission of parol evidence regarding an alleged agreement between Green and Macfarlane's attorney-in-fact (J. F. Bromfield) concerning the application of resale profits from the Manhattan Hotel, and its denial of a new trial. The core issue is the admissibility of parol evidence concerning a compromise agreement, which the appellant argues should have been in writing, and whether Green waived his right to object by not raising a timely objection and by cross-examining Bromfield.
Issue(s)
Whether the lower court erred in refusing to confirm the sale at public auction of the Abucay Plantation. Whether the lower court erred in admitting parol evidence of an alleged oral agreement between the defendant and the plaintiff's attorney-in-fact regarding the application of proceeds from the resale of the Manhattan Hotel. Whether the lower court erred in denying the plaintiff's motion for a new trial.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance of Bataan, declaring the sale at public auction of the Abucay Plantation null and void and ordering the plaintiff to render an account of the sums received from the resale of the Manhattan Hotel.
Ratio Decidendi
On the admissibility of parol evidence and waiver: The Court held that while parol evidence concerning a compromise agreement relative to real property is generally inadmissible unless in writing, the plaintiff waived this objection. The plaintiff's counsel initially objected to the testimony regarding the oral agreement but later cross-examined the witness extensively on the same matter. This cross-examination, after the motion to strike out was denied, constituted a waiver of the right to object to the parol evidence. The Court cited previous rulings in Tongco vs. Vianzon and Abrenica vs. Gonda and De Gracia to support the doctrine that failure to object to inadmissible parol evidence, or cross-examining a witness despite an objection, results in a waiver of the right to object, rendering the evidence admissible. Therefore, the oral agreement between the defendant and the plaintiff's attorney-in-fact was considered validly established. On the authority of the attorney-in-fact and the compromise agreement: The Court found that J. F. Bromfield, as attorney-in-fact for W. R. Macfarlane, entered into an agreement with B. A. Green. In consideration of Green withdrawing his protest against the public auction sale of the Manhattan Hotel, Bromfield agreed, on behalf of Macfarlane, that any profit realized from the resale of the hotel, after covering costs and expenses, would be credited to Green. The plaintiff's counsel admitted the existence of Bromfield's authority to enter into a compromise, rendering the objection to parol evidence on the existence of authority unnecessary. The Court concluded that Macfarlane was responsible for fulfilling this obligation contracted by his representative. On the nullity of the sheriff's sale and the requirement for an accounting: Given the established compromise agreement, the Court upheld the trial court's decision to declare the sheriff's sale of the Abucay Plantation null and void. The plaintiff's obligation to account for the proceeds of the Manhattan Hotel resale was affirmed to determine the state of accounts between the parties. The Court found no error in the order appealed from, affirming it in its entirety.
Main Doctrine
Failure to object to parol evidence, not admissible because it relates to an agreement unenforceable under the law unless in writing, imports waiver of the personal right to object, and renders said evidence admissible. Cross-examination of a witness permitted to testify, notwithstanding a timely objection, upon an agreement unenforcible under the law unless in writing, imports a waiver of said objection and renders said parol evidence admissible, if no exception was taken.